whats in the news

On 22 June 2010 George Osborne delivered his first Budget under the new coalition government. Below is a summary of the property-related measures we believe our website’s users may find of interest:

Value Added Tax – arguably the most important change – the rate will increase to 20% from 4 January 2011. There is no rise in VAT on new build properties.

Capital Gains Tax – this increased to 28% for higher-rate taxpayers with immediate effect (23/06/10).

Income Tax – the personal allowance will increase to £7,475 from April 2011.

Insurance Premium Tax – the current standard 5% rate will increase to 6% and the higher rate from 17.5% to 20%, both from 4th January 2011

Home Information Packs – Although not strictly part of the Budget, the requirement for a seller to obtain a Home Information Pack (HIP) prior to the marketing of their property was been suspended with immediate effect from 21 May 2010. The Energy Performance Certificate (EPC) will still be necessary. Sellers will still be required to commission, but won’t need to have received an EPC before marketing their property
SDLT – again an earlier change introduced back in the March 2010 Budget but a reminder that from 6th April 2011 there will be a new 5% band of SDLT on all purchases of property worth over £1 million. That March Budget also introduced a first-time buyer relief where the consideration is below £250,000 for a 2 year period between 25/03/10 and 25/03/12.

Business Rates – the Government has announced their intention to introduce legislation to cancel back-dated business rates bills eligible for the 8-year schedule of payments scheme for newly assessed properties that were split from a larger ratable property. It is thought the Government also intends to repay those who have already met their back-dated liabilities. The level of small business rate relief will temporarily increase for 1 year from 1st October 2010 giving full relief for eligible businesses occupying premises with a ratable value of up to £6000 and tapering relief to £12,000 (March 2010 Budget).

Council Tax – the Government has announced it will work with local authorities to “freeze” tax for 2011/2012. Detailed have yet to be clarified.

Furnished holiday lets – the current favourable tax regime will not be repealed as was expected but rather the Government proposes to consult during the year to change the rules to ensure they comply with EU requirements and are fiscally responsible. The likely changes will be to the eligibility thresholds and the circumstances for which relief for loses can be claimed but again the detail must be examined carefully once available

Regional Development Agencies will be abolished to be replaced with Local Enterprise Partnerships where demanded by business and locally-elected leaders. A White Paper this Summer will consider options for business rate and council tax incentives that would allow local re-investment into communities and the introduction of a simplified planning consents process in specific areas targeted for business growth.

Major transport schemes – the upgrade of the Tyne & Wear Metro, extension of the Manchester Metrolink, redevelopment of Birmingham New Street station and improvements to the rail lines to Sheffield and between Leeds and Liverpool were all confirmed. High Speed 1 (the Channel Tunnel rail link) will be sold.

A “Green Deal” will be launches for households through legislation in the Energy Security and Green Economy Bill to allow individuals to invest in home energy efficiency improvements paid for through savings in energy bills.”

Landfill Tax – the standard rate will increase by £8 per tonne each year from 1st April 201 until at least 2014 and there will be a minimum rate of £80 per tonne from April 2014 until at least 2020.

Please note that the above is a summary only and is not intended to be fully comprehensive. We recommend that specific legal advice is sought on any particular issue.

Katharine Marshall
Director
0118 957 0206